This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The London 2012 Olympic and Paralympic Games is set to come in under budget, figures from the Government’s final quarterly economic report show. The overall cost of the Games is forecast at £8.921 billion, a saving of £377m on the £9.298 billion budget.

In addition, £103 million of contingency is being held to cover the remaining risks in the programme, such as the retrofit of the Olympic Village for legacy use and closing out around 2,000 ODA and LOCOG contracts. In total, £480m of uncommitted contingency still remains within the budget.

The anticipated final cost (AFC) of the Olympic Delivery Authority’s (ODA) construction and transport programme is £6.714 billion - a decrease of £47 million on the previous figure. Savings made by the ODA on its programme have now reached £1.032 billion.

Minister for Sport, Hugh Robertson said:

London 2012 was a tremendous success and it is a significant achievement to deliver this large and complex programme on time and under budget. The work of the construction and delivery teams, from the ODA and LOCOG, has set a very high standard and I have no doubt that London 2012 has set a new benchmark for the management of Olympic and Paralympic Games in future.

Dennis Hone, Chief Executive of the Olympic Delivery Authority, said:

We are delighted that the venues and infrastructure that we were responsible for delivering proved to be such a big hit and provided an incredible stage and backdrop for the world’s greatest sporting event, for millions of spectators, and for Olympic and Paralympic athletes whose performances will never be forgotten. We are pleased to report even more savings made through careful stewardship of public money. We are now entering the final phase of the ODA’s work, transforming the Olympic Village into thousands of new homes and building a community that will become established, grow and mature in the decades ahead - a London 2012 legacy for generations to come.

Additional funding was released to LOCOG from the funding package, including £26 million for capital works with legacy benefits, £16m for Government’s share of the cost of the Paralympic Games, and £14 million for Olympic Park venues and infrastructure. These costs are all contained within the overall forecast cost of the programme.

The forecast final costs of the Policing and Venue Security programmes have reduced by £20m and £39m respectively due to the return of unspent contingency and other savings. The Venue Security reduction does not assume any savings resulting from the enforcement of LOCOG’s contract with G4S.

The remaining balance of contingency within the Olympic budget now stands at £377 million, with an additional £73 million available to the ODA to cover assessed risks associated with its post-Games work, principally the Village retrofit. The Government also holds a further £30 million of uncommitted contingency set against LOCOG’s post-Games risks. In total, this leaves £480 million of uncommitted contingency remaining.

The change in the ODA’s anticipated final cost is due to a number of factors, including:

A total reduction of £46 million in transport costs, £21m of which is the result of a transfer of work and funding to LOCOG.

A reduction of £15 million in programme contingency to meet assessed risks.

A reduction of £10 million in land and infrastructure costs, partly due to lower than anticipated business rates.

An increase of £36 million in the forecast cost of Olympic Village completion, following internal transfers and a re-assessment of retrofit costs post-Games. This includes buying losses, the continuing impact of contractor insolvency, acceleration and re-phasing to de-risk the programme and ensure transfer to the purchasers by March 2014, enhanced security, and extra assurance costs to ensure delivery remains to timetable.

The ODA is now transforming the apartments in the Olympic Village into thousands of new homes, removing partitions and fitting kitchens. It is also converting the Chobham Academy and Polyclinic/Health Centre into their post-Games configurations. In addition the ODA is also concluding its commercial contracts relating to the Games and returning temporary Games-time venues to their previous use and owners.